If the Real Estate Roundtable’s third quarter Sentiment Survey is any indication, commercial real estate markets in the States continue to enjoy a slow but steady recovery. Slight increases over the second quarter in two of the survey’s indices, “Overall” and “Current” quarter are in line with overall economic growth detailed in a recent positive report about higher-than-predicted gross domestic product (GDP) in April, May and June. Craig Barrett, co-owner of NBI Properties in Fort Walton Beach says the survey results are reflective of what his firm has been experiencing on the Emerald Coast.
“We’re busier than we were at this time last year,” noted Barrett. “We’re leasing properties to new businesses, franchises, and to professionals relocating to this area. Also, financing options have definitely improved since last year and investors are finding it easier to obtain sources of capital.”
Overall, the survey reported that commercial real estate is on the upswing, although some respondents voiced concern over policy matters on Capitol Hill that could affect the industry. Notably, some said they feared recovery is threatened by policy-related risks such as the scheduled expiration of the federal Terrorism Risk Insurance Act (TRIA) on Dec. 31 and the looming prospect of higher interest rates.
“We’re somewhat concerned about the TRIA expiring because it could cause a wave of economic setbacks and problems,” said Barrett. “I think we’d definitely see difficulties with banks and lenders again, which would mean that funding for new projects could come to a halt.”
The U.S. Senate voted resoundingly (93-4) for a seven-year reauthorization of the TRIA on July 17. House legislation countering with five-year extension program reforms cleared a key committee in June, but remains in limbo until Congress meets again in September.